House Price Growth, Collateral Constraints and the Accumulation of Homeowner Debt in the United States

Disney Richard () and John Gathergood
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Disney Richard: University of Nottingham

The B.E. Journal of Macroeconomics, 2011, vol. 11, issue 1, 30

Abstract: Using household panel data, we present evidence on the relationship between house price growth and household indebtedness among homeowners in the United States for the period 1999 to 2007. We posit an underlying mechanism whereby rising housing wealth allows households to increase their collateralised borrowing. Over the period, we find that roughly one-fifth of the growth in indebtedness among U.S. households can be explained by rising house prices. This housing wealth–indebtedness link is stronger among the minority of households that were initially “collateral constrained.”

Keywords: housing wealth; collateral; unsecured debt; housing equity (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (18)

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DOI: 10.2202/1935-1690.2229

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